In 2014, 36 percent of international buyers who purchased real estate in the U.S. came from China; many of them purchased property in Silicon Valley. Chinese Realtors, however, say it’s not true that all Chinese buyers seek out Chinese agents.

“Chinese people do not necessarily have to work with Chinese agents, just like Caucasian clients do not necessarily have to work with Caucasian agents,” said Mark Wong, who was born and raised in Hong Kong and is now a Realtor with Alain Pinel Realtors in Saratoga.

Wong, along with Taiwan native Amy Sung, a Realtor with Pacific Union International Real Estate in Menlo Park, comprised a panel on “Doing Business with China.” The program presented at the Silicon Valley Association of Realtors focused on the “nuts and bolts” of working with Chinese clients. Other real estate professionals familiar with the real estate rules and regulations of that country who shared experiences and challenges encountered when closing a deal were Kenneth Chan, premier mortgage consultant with HSBC in Palo Alto, presenting the lender perspective, and Jessie Wu, escrow officer with First American Title Company in Cupertino, presenting the escrow perspective.

Sung stressed it is most important to show respect for Chinese buyers who are not well-versed in English. Sung pointed out that just because they don’t speak English well does not mean the Chinese buyer is not educated. “Remember that they are eager to practice their language skills. Do not treat them like slow-understanding children,” said Sung.

Wong emphasized establishing personal relationships and trust are important to the Chinese. Learn and respect the Chinese culture, including the principles of Feng Shui and what numbers and colors mean to the Chinese, said Wong.

The Realtors said it also important to be sensitive to Chinese gestures. Since they dislike confrontation, the Chinese won’t say “no.” “Maybe” probably means no. A nod may mean that they are listening, but not necessarily agreeing. Never embarrass your Chinese client, or ask them where the money came from.

Chan related instances when transferring money can complicate a transaction if parties involved do not know the rules. The Chinese government limits the transfer of money abroad to $50,000 a year. Chan also reminded agents that lenders require two months of bank statements. Large deposits during that period are flagged. This can be a challenge, said Chan, because the Chinese are very investment conscious and are accustomed to moving their money around.

“Unaccounted large deposits during the two-month period is a deal killer. Over-the-counter cash deposits are also red flags because of the potential for money laundering,” said Chan. “The client needs to present clean bank statements.”

Wu reminded agents to verify their Chinese client’s legal name, since Chinese names are different from Western names. It may not matter much when the client buys the house, or in a cash transaction, where there is no need to verify the identification of the client, but it will matter when it is time for that client to sell the property.

Wu gave the example of a $2 million sale and receiving 40 different wire transfers of $50,000 from relatives, employees, friends of the actual buyer. Money transfers require a third party transaction document, similar to a gift letter. With no escrow number, no name of the buyer and no property address, the money had to be returned to the senders. Such a situation can delay or kill a deal, especially one that requires an all cash seven-day closing. All this information needs to be provided in order for the escrow company to accept the money.

Presented by the local trade association’s Global Business Council, “Doing Business with China” is the first of a quarterly series exploring different aspects of doing business with clients from other countries. A second program focusing on Mexico will be presented early next year.

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